The Emergency House Fund
We talk about money on this blog a lot. Truth be told, we probably don’t talk about it enough. There are very few, if any, financial decisions made by most people to rival that of buying their first home. If you’re a working class person, buying a home can result in a lot of anxiety due to financial concerns and uncertainties. Even if you’re fully employed and doing fine today, the world has proven all too clearly that the situation could change overnight. For this reason, only a small handful of people have the luxury of being able to buy a home without incurring worrisome debt.
Today we want to look a little at this debt and consider one of the ways to fight the uncertainty.
Once you own a home, the financial obligation is just beginning. For many people, although the monthly mortgage might be less than renting, the added costs of home maintenance swiftly surpasses what they might otherwise be handing over to a landlord.
Like everything else in the world, buildings are in a constant state of decay. Left to its own devices, the natural world would devour most structures within a matter of years. This means that a house, like any building, requires regular caretaking. Roofs leak, foundations crack, furnaces go out, and things will break at a rate you will occasionally find alarming.
Without proper preparations, each of these events can become an unprecedented disaster. Which is why we highly recommend setting up a home repair and maintenance fund.
It doesn’t matter if you’re even at the stage where you are placing offers on a house: start the fund now. In an ideal situation, you will find yourself gathering enough money within the fund to cover your home’s mortgage and taxes for three to six months. This will, in most cases, cover the various issues that arise after you move in and begin to discover all the surprises that your home has in store for you.
Don’t make the mistake of thinking that you will simply put all purchases on a credit card. This very quickly leads to a debt load that you absolutely do not want to handle when also trying to make mortgage payments.
Starting now, every paycheck you should put money into a new account specifically for home maintenance and repair. After you finally find the right home, and after your offer is accepted, and after you move in, you will be extremely glad that you did.